Page last updated at 10:30 GMT, Monday, 18 January 2010

UK cities 'will take years to recover from recession'

Sale signs at a shopping centre
The organisation assessed the fortunes of 64 towns and cities around the UK

It will take "years" for some UK cities and towns to recover from the recession, a report by the independent think-tank Centre for Cities has said.

Areas with highly educated workforces, including Cambridge and Edinburgh, are well-placed to bounce back, it claimed.

But locations including Stoke-on-Trent, Burnley and Newport are suffering because people there are less qualified and there are fewer business start-ups.

The gap grew between the top and bottom of the economic rankings, it added.

Hull had the highest percentage of people claiming jobseeker's allowance while Cambridge had the lowest - but the gap between the two places nearly doubled in that time.

'Tough outlook'

The study assessed 64 of the UK's cities and towns over the past two years and predicted an "uneven recovery" for them.

CITIES REPORT

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It said locations which already had robust economies were more likely to grow stronger, leaving the areas which did not have strong private sectors or good graduate skills further behind.

It notes that London, Birmingham, Leeds, Liverpool and Manchester accounted for 39% of all jobs in England in 2008.

"The turnaround of our largest cities will be critical to the national recovery," the report said.

It added that "Brighton, Milton Keynes, Reading, Cambridge and Edinburgh have the right ingredients to succeed after the recession has passed.

The national economy may be emerging from recession but cities like Brighton are likely to recover more strongly than the likes of Barnsley
Dermot Finch
Chief executive, Centre for Cities

"They have strong private sectors, high levels of entrepreneurship, highly educated workforces and large shares of knowledge-intensive jobs."

"Other cities, such as Stoke, Burnley, Barnsley, Newport and Doncaster, with their weaker business base, have a much tougher outlook."

The report said thousands of private-sector jobs had been lost over the past decade in these places, where there was a lack of business start-ups and highly-qualified residents.

Graph showing regional variations in growth

"The national economy may be emerging from recession but cities like Brighton are likely to recover more strongly than the likes of Barnsley," the chief executive of Centre for Cities, Dermot Finch, said.

"Party leaders need to wake up to the reality that some cities will still feel in the middle of a recession until well after the election.

"The next government needs to help these struggling cities fix the basics - like improving schools and public transport - so they can attract new business and jobs."

The report said although "the financial heart of the City of London was in some ways the epicentre of the recession", the capital had, so far, not suffered as much as other parts of the country.

We won't give up on anyone who is out of work, especially people in our towns and cities that have been hit hardest by the recession
Jim Knight

It attributed this to London's position as a city where the focus was "global business", and the "disproportionate effect" of the downturn on the manufacturing and traded industries.

It said there had been "large increases" in the number of benefit claims made in cities such as Hull, Birmingham and Rochdale - places it described as having "already high unemployment" rates.

Hull is estimated to have 16 jobseekers for every vacancy.

Scarred communities

Employment and Welfare Reform Minister Jim Knight said the government was creating 170,000 jobs for the unemployed, 50,000 in "unemployment hotspots" as part of a £5bn investment scheme.

"We won't give up on anyone who is out of work, especially people in our towns and cities that have been hit hardest by the recession.

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We've a digital/IT revolution and like the industrial revolution, there will be winners and losers
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"Job losses have been quite evenly spread across regions, which should help recovery and mean less long-term scarring of communities than we have seen before," he said.

Local Government Association chairman Margaret Eaton said a national "one-size-fits-all solution" was not viable.

"The fastest way to move from recession to recovery is for more decisions about the economy to be made at a local level, which means councils continuing to work with local people and businesses," she said.

Shadow work and pensions secretary Theresa May said more had to be done to help young people back into work but recovering from the recession was likely to "be long and hard".



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